The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like ES Ceramics Technology Berhad (KLSE:ESCERAM). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

Check out our latest analysis for ES Ceramics Technology Berhad

ES Ceramics Technology Berhad's Improving Profits

In the last three years ES Ceramics Technology Berhad's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. So it would be better to isolate the growth rate over the last year for our analysis. Over the last year, ES Ceramics Technology Berhad increased its EPS from RM0.077 to RM0.083. That amounts to a small improvement of 8.0%.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. The music to the ears of ES Ceramics Technology Berhad shareholders is that EBIT margins have grown from 39% to 44% in the last 12 months and revenues are on an upwards trend as well. That's great to see, on both counts.

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

ES Ceramics Technology Berhad isn't a huge company, given its market capitalisation of RM122m. That makes it extra important to check on its balance sheet strength.

Are ES Ceramics Technology Berhad Insiders Aligned With All Shareholders?

Seeing insiders owning a large portion of the shares on issue is often a good sign. Their incentives will be aligned with the investors and there's less of a probability in a sudden sell-off that would impact the share price. So those who are interested in ES Ceramics Technology Berhad will be delighted to know that insiders have shown their belief, holding a large proportion of the company's shares. Owning 42% of the company, insiders have plenty riding on the performance of the the share price. Shareholders and speculators should be reassured by this kind of alignment, as it suggests the business will be run for the benefit of shareholders. Valued at only RM122m ES Ceramics Technology Berhad is really small for a listed company. So despite a large proportional holding, insiders only have RM51m worth of stock. That's not a huge stake in absolute terms, but it should help keep insiders aligned with other shareholders.